IMHO the answer is no, as long as it's not too bad(single digit). US government needs inflation to inflate away the huge national debt. The young generation need wage inflation to close the wealth gap with the old generation, if asset prices don't go up as fast as wages. USD won't lose reserve currency status if interest rate is above official inflation rate.
Do we really need to fight inflation?
- Thread starter CoolTrader
- Start date
WRONG! Inflation is like an aggressive cancer.... in the long run, devastates everything!
Prices outpacing wage growth. The dual mandate states "price stability" and MODERATE long term rates as priorities which are to be balanced against the concern of "full employment".
Under the "rule of seventy-two" or doubling rate, current CPI/PCE is very far removed from the conservative 2% target. 72/2 implies a price doubling every THIRTY-SIX YEARS. At the current CPI of 3.5, you would see prices doubling every 72/3.5 ~ TWENTY YEARS!!
Under the "rule of seventy-two" or doubling rate, current CPI/PCE is very far removed from the conservative 2% target. 72/2 implies a price doubling every THIRTY-SIX YEARS. At the current CPI of 3.5, you would see prices doubling every 72/3.5 ~ TWENTY YEARS!!
are you on drugs? go live in turkey, argentina, or even uk and germany for few years, see how far can your money go.
in addition, wealth is created via different multi decade productivity cycles, while wage is the cost of inputs in these cycles, not the outputs.
Given the astonishing growth rate of our national debt, I don't see any solution other than high inflation. Young people need big wage increase to afford homes whose prices have been inflated by stimulus monetary and fiscal policy for over a decade. As more young people join the work force, wage pressure will grow.
Scatty, of course you are correct.
But don't be too hard on the guy.
He's just repeating what he hears on TV.
The MSM is clearly Cheerleading for the FED.
you are right in the last point. general economic theory is that gdp growth causes inflation, as people have more income, hence drive up the prices in general. that’s why most of the central banks set their inflation target inline with their own gdp growth rate to offset.
young people can’t afford their homes are not really a problem but media gave headlines. they can inherit or stay or keep their parent’s houses. but government taxes on inheritance on one end and posts gifts tax on another, that’s really dumb.
national debts are our own making, adding a balance budget to the constitution would solve it but the united states will not be a special country nor a superpower anymore. the biggest export is the us dollars.
When Nixon took the U.S. Dollar off the gold standard (August 10, 1970?), he should have produced an economic plan to avoid this current head on train wreck where we are now.
The seeds from this whole thing go back at least to Bretton Woods Agreement
The massive exodus of jobs (factories) was visible already in late 1970's.
But the all-time favorite play of our National Politicians is whatever vote-buying scheme is in vogue.
Let the good times roll.
Any financial sacrifice will have to wait.
The seeds from this whole thing go back at least to Bretton Woods Agreement
The massive exodus of jobs (factories) was visible already in late 1970's.
But the all-time favorite play of our National Politicians is whatever vote-buying scheme is in vogue.
Let the good times roll.
Any financial sacrifice will have to wait.
Last edited: